Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Question

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Answer 1

Question

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.

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Answer 2

Question

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.

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Answer 3

Question

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.

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Answer 4

Question

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.

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Answer 5

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.

Answer 6

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.

Answer 7

Chapter 7, Problem 1DQ

To determine

Describe the statement given by Person L and the role of financial analysts play in the earnings quality.

Answer 8

Expert Solution & Answer

Explanation of Solution

The auditors are expected to perform the audit independently. When the management and auditors collide to decisive the public, the fraud may be very hard to decipher. This may in turn adversely affect the quality of earnings and the compromise the faithful representation of the financial data.

The financial analysts tend to predict the earnings expectations of the firm, which in turn motivate the investors to purchase the shares. If these forecasts are not met, then the share value may drop and have a negative impact on the company. In order to fix such things the management may use income smoothing techniques.